In the News

Jersey Mike's not just for the Shore

September 10, 2012 • Shopping Centers Today • By Joe DiStefano

One never knows what one will get when hiring temporary summer staff. Peter Cancro was a 14-year-old when he took a summer job at Mike’s Giant Size Submarines in 1972. Three years later Cancro purchased that local-landmark sandwich shop in the seaside town of Point Pleasant, N.J., with the help of his football coach — at the time, Cancro was not old enough to legally work the slicer. Over the decade following, Cancro opened two more Mike’s shops, and in 1987 he began franchising and changed the name of the business to Jersey Mike’s Subs — perhaps in a flush of state pride. Today Cancro is CEO of Jersey Mike’s Franchise Systems, a chain of 550 shops across 31 states.

The chain, founded in 1956, when sandwich shops were a novel concept, now ranks 13th in sales among sandwich chains, according to Chicago-based food industry consulting firm Technomic. By the firm’s estimate, Jersey Mike’s posted some $210 million in sales last year. That may not have category leader Subway (which racked up $11.4 billion in sales last year) biting its nails, or No 2. Arby’s ($3.03 billion in sales) pacing the floor at night, but the company does plan to open its first store in New York City by the end of this year and says it is on track to have 1,000 in operation by 2016.

Regardless of location, every Jersey Mike’s unit pays tribute to the chain’s Jersey Shore roots with a poster of a retro postcard that reads Greetings from Point Pleasant, New Jersey. Two dozen sandwiches are on offer, hot and cold, including such classics as the Jersey Shore’s Favorite — stuffed with provolone, ham, and cappacuolo — and the Philly cheesesteak, plus, for those with a giant appetite, 15-inch subs. The bread is baked in-house, just as it was in the 1950s, and the deli meats are sliced fresh by a staffer who banters with the customers and encourages them to dress their sandwiches “Mike’s way” — with onions, lettuce, tomatoes and a signature blend of olive oil, red-wine vinegar and spices.

“It’s an assembly-line process, but we don’t want it to feel like an assembly-line process,” said Hoyt Jones, president of the Manasquan, N.J.–based chain. “We want it to be interactive between the customer and our staff so that it’s an enjoyable experience as you’re going down the line, like two friends talking.”

Consumers are attracted by both the freshness of the product and the interactivity, according to Darren Tristano, executive vice president of Technomic. “They’re not just pulling meat that’s wrapped in wax paper out of a bucket, they’re actually hand slicing it out of a deli cabinet.”

The restaurants range from 1,400 to 1,800 square feet, and many are located in open-air centers. “We love end caps when we can get them,” Jones said. “We like outdoor seating especially.” Jersey Mike’s likes to be near chains with brand strength. “We love it when we’re near a Chipotle, Smashburger, Five Guys — you know, the better-burger category,” Jones said. “I don’t know if there’s a better-sandwich category.”

Tristano seems to believe that indeed there is a superior-sandwich category, citing Jimmy John’s and Firehouse Subs. “It’s a big area of opportunity, and it’s just looking at American consumers who are willing to pay a little more for something much better.” Tristano says he expects the fast-casual sandwich category to be one of the next big things.

Jones estimates that some 85 percent of the chain’s restaurants are in open-air centers and says that shopping centers will continue to play a role in the company’s real estate strategy. Jersey Mike’s opened its first mall food-court unit in April, at Westfield Santa Anita Mall, Arcadia, Calif. “Jersey Mike’s is a great addition to our food-court offering,” said David L. Burke, the mall’s general manager. Jersey Mike’s is set to open a restaurant at Macerich’s Pacific View Mall, in Ventura, Calif., in the fourth quarter. “If these mall units continue to prosper like they are, then we might get more aggressive,” Jones said.

Lifestyle centers are on the radar, too. The chain opened a restaurant at The Americana at Brand, in Glendale, Calif., in February. “The management team is thrilled to be in partnership with Jersey Mike’s,” said a spokeswoman for Americana at Brand owner Caruso Affiliated Holdings. “They offer a wonderful guest experience and a fresh, consistent product. It is no surprise that the Jersey Mike’s at the Americana at Brand is performing above the Los Angeles district average in such a short period of time.”

Jersey Mike’s opened a unit at East Gate Square, a 900,000-square-foot open-air center in Moorestown, N.J., in July. “We couldn’t be more pleased,” said Michael Gorman, the center’s leasing agent and a fan of the chain’s pastrami Reuben.

Meanwhile, who knows what this summer’s crop of summer temps will bring to tomorrow’s world of ­retailing?